Tuesday, March 26, 2013

Cap And Trade Scheme Still Alive

Here comes Team Obama's carbon tax

The Treasury Department’s Office of Environment and Energy has finally begun to turn over documents about its preparations for a carbon tax in response to transparency warrior Chris Horner’s Freedom of Information Act request. The documents provide solid evidence that the Obama administration and its allies in Congress have every intention of implementing a carbon tax if we fail to stop them.

The Office of Environment and Energy, if you’ve never heard of it, is housed in Treasury’s Office of International Affairs and exists principally to wait for authority to administer the revenue from a cap-and-trade scheme or carbon tax. And, apparently, to trick Americans into supporting the tax to provide it the money. So the documents they’ve reluctantly released are worth a careful look.

There’s the helpful IMF report from Ian Parry of the Fiscal Affairs Department on “Public Sources of Climate Finance.” Parry’s stated goal for the United States is “raising revenue and putting it to good use.”

He suggests a $25 per metric ton carbon tax – right in the middle of the range suggested by the discussion draft legislation recently released by U.S. Rep. Henry Waxman, the top Democrat on the House Energy and Commerce Committee – and noted that $25 billion a year could be sent abroad “for climate finance.”

He singles out aviation and maritime fuels as “under-taxed” and suggests new taxes on fuels or directly on aircraft and ship operators. Parry notes that this “will harm developing countries” – for the simple reason that it’s economically harmful -- and concludes “compensation needed for fairness.” (Obama recently asked Congress to OK another $65 billion in increased IMF dues, no doubt so we can receive more of this kind of advice.)

By far the biggest document is from the World Bank. It’s titled “Inclusive Green Growth: The Pathway to Sustainable Development.” The document itself is posted on the World Bank website, but that doesn’t mean its use at the U.S. Treasury Department doesn’t require scrutiny. The report notes that “some observers, mostly in high-income countries, have argued against the need for more growth, suggesting that what is needed instead is a redistribution of wealth.” It seems this “remains more relevant for high-income countries” like the United States.

The report goes on to outline how a carbon tax could be used to drive a massive redistributive scheme based on – believe it or not – Iran as a model of success: “The political economy of reform will likely require compensatory transfers to the middle class. In the Islamic Republic of Iran… 80 percent of households received significant transfers—no doubt contributing to the success of the reform.” It continues: “In the end, the redistributive impacts of a carbon price scheme depend on how revenues from the scheme are used.”

Such a redistributive scheme is a key element of carbon tax proposals from Waxman and from Barbara Boxer, the chair of the Senate Environment and Public Works Committee.

It’s easy to foresee a “gas stamps” program much like food stamps that would provide a taxpayer-funded gas purchasing card to people up to some multiple of the federal poverty level. Much like ObamaCare, a policy driving up costs would be paired with a huge new welfare program that would foster government dependency and political loyalty.

The World Bank paper also advises Treasury on how to convince the public. It says to call the carbon tax an “offset” instead of a “tax,” and downplay economic costs to “focus on framing green policies as a way to reach an ambitious and positive social goal (such as becoming carbon neutral by 2050 or becoming a leader in solar technologies).”

This advice helps explain why an administration so heavily invested in implementing a carbon tax attempts to deny any such thing is going on.

What else are they hiding? At least 10,000 emails from 2012 alone. Horner has filed suit, and Treasury can only stonewall for so long.

One thing that’s already clear is that the preparations to pursue a carbon tax are very much proceeding in earnest.